DUBLIN, Ireland - The Irish Competition Authority (CA) hasblocked the disaffiliation of several credit unions by the IrishLeague of Credit Unions (ILCU). The decision pending a full hearingis the result of "ongoing discussions with regard to the League'sinsurance requirements for member credit unions. The main issue isthe entitlement of non-League affiliated credit unions' right toaccess the savings protections scheme, the scheme set up by theLeague to protect credit union members' savings in the event of acredit union encountering financial difficulties," according to anews release issued by ILCU's solicitors (attorneys)McCannFitzgerald. The savings protection scheme works on the sameprinciple as NCUA insurance to protect member's savings. There aresome differences though. Savings, for example, are insured only upto 12,500 Euros (US$14157). The insurance is funded through theECCU, ILCU's subsidiary, not the government. League credit unionspay into the scheme. If the unnamed credit unions weredisaffiliated they could lose some 9 million Euros (US$10). Therenegade credit unions allegedly wanted to get their insurancecover from someone other than ECCU, the ILCU said. The CA was theirtool. The purpose of the CA according to the CA Web site,www.tca.ieis to encourage "greater competition in the economy."They believe this "stimulates innovation and efficiency amongbusiness; enables consumers to buy goods and services at the bestpossible price; and enhances overall national competitiveness." TheCA takes action when "anti-competitive behaviour occurs when firmsagree to fix prices, limit output, divide business between them orabuse their market power, with no benefits to consumers." ILCU doesnot feel this is the situation when they limit their services totheir members. They argue their members should follow the rules setdown. ILCU pointed out that those rules were voted on by the fullmembership, including those who want to break them now. ILCU's CEOLiam O'Dwyer said that "the League Board has received detailedlegal advice from McCann FitzGerald Solicitors, supported byeconomic advice, that mandatory insurance does not contravene theCompetition Act 2002 and that the League Board are entitled todisaffiliate credit unions who do not comply with these rules."O'Dwyer termed the CA's ruling delaying disaffiliation"disappointing." The unnamed credit unions are allegedly trying toset up their own league. The exact number was not able to bedetermined although different sources in the movement gaveestimates from five to 20. There are approximately 300 creditunions belonging to ILCU. One source, who asked not be named, saidhe believed that Tullomore Credit Union was heading up thecomplaint and the rival movement. Tullomore's General Manager didnot return Credit Union Times' telephone calls. To reducelitigation costs, ILCU agreed before the High Court to postpone anydecisions about the disaffiliation pending a final hearing. "Wehave at all times sought to co-operate with the CompetitionAuthority. Our legal and economic advice is that the League's rulesand practices do not breach competition law. We are satisfied thatour position is correct. We are confident that the courts willuphold this position," O'Dwyer said. The matter was expected to besolved at a hearing to be held in October. -

[email protected]